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Income Inequality and Trade Flows: A Country Study for 2001
Södertörn University College, School of Social Sciences.
2011 (English)Independent thesis Advanced level (degree of Master (One Year)), 30 credits / 45 HE creditsStudent thesis
Abstract [en]

This paper tests the relationship between income inequality and trade flows. The model is based upon Helena Bohman and Désirée Nilsson (2007) and Mitra Trindade and Dalgin (2008). This paper will set up gravity model for 50 countries which includes, income distribution, population, average individual income level and GINI variable as distribution of disposable income as an explanatory variables. Results confirm that when income inequality increases in the exporting country, export of necessities increase and export of luxuries decrease. Income distribution also shows expected effect on trade flows in the importing country. When income inequality increases in the importing country, import of necessities decrease and import of luxuries increase.

Place, publisher, year, edition, pages
2011. , 36 p.
Keyword [en]
income distribution, luxuries-necessities, non-homothetic preferences, gravity model
National Category
URN: urn:nbn:se:sh:diva-9212OAI: diva2:423969
Subject / course
2011-06-09, MA613, 09:00 (English)
Social and Behavioural Science, Law
Available from: 2011-06-20 Created: 2011-06-16 Last updated: 2011-06-20Bibliographically approved

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